Unibail-Rodamco-Westfield (URW) believes its profits will return to pre-covid levels in 2023, and will be in ‘full effect’ in 2024.
The vast majority of its profits will come from its European business, it said in an update as the French listed company paves a recovery towards 2024 and beyond.
Along with its retail income, the company expects its convention and exhibition line will help pitch in as the market recovers, together with the delivery of URW’s pipeline of assets.
It is also eyeing extra revenue from advertising due to its data collection of 550mln annual visits to its centres. ‘URW’s investments in media assets and data capabilities will generate €75mln in annual net revenues by 2024, a €45mln increase compared to 2021, with strong growth potential beyond the plan horizon,’ it said.
MIXED USE
In other key tenets, URW will try to derive value via untapped sustainable mixed-use developments. Here, it has a €2bn pipeline that could generate €123mln. Plus, it has identified up to 2.4mln m2 of development opportunities that might add a further €1bn to the pipeline.
Its deleveraging process is in the final stages as well as its complete ‘radical’ reduction of financial exposure to the US. Once completed, URW’s loan-to-value is expected to be below or around 40% including the group’s hybrid bonds.
€1.5BN SALES THIS YEAR
In Europe, URW will secure the remaining €1.5bn of its €4bn disposal programme by the end of 2022.
Sales will be of non-core assets as well as the disposal of stakes to institutional investors, where URW will receive asset and property management fees.
The company further explained ‘URW will continue to sell mature assets that do not meet its return criteria or that do not fit its destination strategy. URW will continue to invest in projects and acquisitions on an opportunistic basis, looking at the expected Internal Rate of Return, the level of risk and any balance sheet constraints. URW will resume the payment of sustainable dividend from fiscal year 2023.’
Jean-Marie Tritant, CEO, said: ‘By 2024, we will have successfully reshaped the business to capture future growth, centred on our portfolio of Flagship destinations in the wealthiest cities and catchment areas in Europe.’
Physical stores are a vital part of leading brands’ omnichannel and drive-to-store strategy, a role reinforced and validated by the post-pandemic recovery. Our top 50 retailers in Europe have increased their GLA and MGR with us since 2019, while in many cases streamlining their store portfolios elsewhere. This dynamic will support a full recovery of our European retail NRI and Group EBITDA on a stabilised basis to pre-covid levels’.’
Tritant became chairman and group CEO in 2020 when the former management team failed to win support among shareholders for a previous strategy.
He first joined the company in 1997 and was president of US operations.
The company has €54.5bn of assets. As of 31 December 2021, 86% of assets were retail, leaving 6% in offices, 5% in convention and exhibition halls, and 2% in services.
In total it has 85 shopping centres.
